SMM Morning Comments (Apr 17): Shanghai base metals opened higher across the board Friday, copper rebounded 2%

SHANGHAI, Apr 17 (SMM) – SHFE nonferrous metals opened higher across the board on Friday morning, recovering some losses Thursday, as investors caution eased amid US tentative steps to restart the economy and progress on the fight against the coronavirus.

SHFE copper advanced more than 2% in early trades, with tin rising as much as 2.57%. 

LME base metals closed mixed on Thursday after the release of US jobless data that showed a record 22 million Americans filing for unemployment benefits in the last month.

London copper climbed 0.1%, aluminium edged up 0.07%, zinc rose 0.26%, while nickel fell 0.08%, lead eased 0.44%, and tin slipped 0.4%.

Mining giant Rio Tinto on Friday slashed its copper production target by more than 50,000 mt, to 475,000-520,000 mt for 2020, due to the impact of government restrictions affecting its mine operations in Chile, as well as earthquake damage at its mine in the US.

Copper: The market focus has been on the economic impact of the coronavirus and its hit to oil demand, which kept copper prices lower in the previous two sessions. The declines, however, were limited amid supply disruption on the mining front and accelerated inventory draw in China. Today, three-month LME copper is expected to trade between $5,170-5,250/mt with the most-active SHFE contract at 42,000-42,500 yuan/mt. 

Zinc: Three-month LME zinc failed to test pressure from the 40-day moving average overnight as it lost steam after hitting a session high of $1,965/mt, finishing 0.26% higher on the day at $1,932/mt. LME zinc inventories shrank 600 mt on Thursday to 99,150 mt, still staying at high levels. SMM retains its view that the near-term upsides of LME zinc will be limited, and a boost to zinc consumption from the two trillion US investment in infrastructure may only show in H2. 
LME zinc is expected to trade between $1,910-1,960/mt today with the most-active SHFE contract at 15,600-16,100 yuan/mt. 

Nickel: Three-month LME nickel stemmed decline at a session low of $11,620/mt, trimming some losses and ending Thursday 0.08% lower at $11,760/mt. The K-indicator remained between the five- and 40- day moving averages and pressure from the 40-day moving average will be monitored. 

Lead: Three-month LME lead hovered around $1,695/mt in thin trading, closing down 0.44% on the day at $1,690.5/mt after hitting an intraday low of $1,686.5/mt. The weekly and monthly moving averages remained in a downward trend. 

Tin: Three-month LME tin traded sideways in a broad band overnight. It bounced back quickly after dipping to a session low of $14,935/mt, closing at $15,070/mt, 0.4% lower on the day. Support below is expected from $15,000/mt, or $14,700/mt today.